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Diaz v. Naylor

United States District Court, E.D. Virginia, Alexandria Division

February 7, 2019

ERNESTO M. DIAZ, et al., Plaintiffs,
v.
RODNEY L. NAYLOR, Defendant.

          REPORT AND RECOMMENDATION

          THERESA CARROLL BUCHANAN UNITED STATES MAGISTRATE JUDGE.

         THIS MATTER comes before the Court on Plaintiffs' Motion for Entry of Default Judgment (Dkt. 7).[1] After representatives for Defendant failed to respond to Plaintiffs' motion or to appear at the hearing on January 4, 2019, the matter was taken under advisement.[2] For the reasons stated below, the undersigned U.S. Magistrate Judge recommends that Plaintiffs' Motion for Default Judgment be GRANTED.

         I. INTRODUCTION

         A. Background

         On October 9, 2018, Ernesto M. Diaz, Jesus G. Gonzalez, Encarnacion Romero-Alverez, Jorge A. Torres, Noe Sigfredo Alvarado Torres, Lidia M. Adams, Ninna K. Adams, and Martha L. Torres ("Plaintiffs")[3] filed this lawsuit against Rodney L. Naylor ("Defendant") alleging violations of the Fair Labor Standards Act ("FLSA"). Plaintiffs now seek an entry of default judgment that awards them monetary damages and attorney's fees and costs. (Mot. Default J. at 7.)

         B. Jurisdiction and Venue

         Before the Court can render default judgment, it must have both subject-matter jurisdiction and personal jurisdiction over the defaulting parties, and venue must be proper.

         The Court has subject-matter jurisdiction over this action. A federal district court has original jurisdiction when an action involves a civil action "arising under the Constitution, laws, or treatises of the United States." 28 U.S.C. § 1331. Similarly, 28 U.S.C. § 1337(a) provides that "district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies." The FLSA itself also states that any action to recover unpaid minimum or overtime wages may be maintained "in any Federal or State court of competent jurisdiction." 29 U.S.C. § 216(b). Since this action arises from a law of the United States, the FLSA, and further arises from an Act of Congress regulating commerce, this court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and 1337.

         The Court has personal jurisdiction over Defendant in this action. For personal jurisdiction over a defendant, the standards of both federal due process and the forum state's long-arm statute must be satisfied. See Tire Eng'g & Distrib.. LLC v. Shandong Linglong Rubber Co.. 682 F.3d 292, 301 (4th Cir. 2012). Federal due process permits personal jurisdiction where a defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington. 326 U.S. 310, 316 (1945) (quoting Milliken v. Mever. 311 U.S. 457, 463 (1940)). Virginia's long-arm statute, Virginia Code § 8.01-328.1, "extends the jurisdiction of its courts as far as federal due process permits." ePlus Tech., Inc. v. Aboud. 313 F.3d 166, 176 (4th Cir. 2002). With federal due process and Virginia's long-arm statute requiring the same standards, essentially only one personal jurisdiction inquiry is required. See id. The inquiry to find personal jurisdiction requires either specific jurisdiction "based on conduct connected to the suit" or general jurisdiction based on "continuous and systematic" activities in the forum state. Tire Eng'g & Distrib.. 682 F.3d at 301 (quoting ALS Scan. Inc. v. Dig. Serv. Consultants. Inc.. 293 F.3d 707, 711 (4th Cir. 2002)). As stated in the Complaint, Defendant regularly conducted business in the Commonwealth of Virginia. (Compl. ¶¶ 10-12.) Therefore, Defendant has maintained sufficient contact with Virginia based on conduct connected to this case to allow the Court to have personal jurisdiction over Defendant. Additionally, venue is proper in this Court pursuant to 28 U.S.C. § 1391. (Id. ¶¶ 20, 24-32; Mot. Default J., Ex. 1.)

         For these reasons, the undersigned recommends a finding that this court has subject-matter jurisdiction over this action, that this court has personal jurisdiction over Defendant, and that venue is proper in this court.

         C. Service of Process

         Before the Court can render default judgment, it must be satisfied that all defaulting parties have been properly served. As a general rule, a defendant must be served with the summons and complaint filed with a federal court. See FED. R. Civ. P. 4. However, various avenues exist to serve a defendant.

         Federal Rule of Civil Procedure 4(e)(1) allows service on an individual within a judicial district of the United States pursuant to state law for service in the state where the district court overseeing the lawsuit sits or state law for service in the state where service is made. Under Virginia law, a plaintiff may make service of process on a nonresident of Virginia via the Secretary of the Commonwealth if a court in Virginia can exercise personal jurisdiction over the defendant. Va Code. § 8.01-329(A). In order to properly effectuate service on the Secretary, a plaintiff must file an affidavit with the court, "stating either (i) that the person to be served is a nonresident or (ii) that, after exercising due diligence, the party seeking service has been unable to locate the person to be served. In either case, such affidavit shall set forth the last known address of the person to be served." Id. § 8.01-329(B). Service via the Secretary of the Commonwealth is "effective on the date when service is made on the Secretary." Id. § 8.01-329(C).

         Here, Defendant is a non-resident of the Commonwealth of Virginia. (Compl. ¶ 10.) Plaintiffs followed the required steps to effectuate service on Defendant via the Secretary of the Commonwealth. (Dkt. 3.) Additionally, Plaintiffs have sufficiently alleged that this Court has personal jurisdiction over Defendant. Therefore, based on the foregoing, the undersigned recommends a finding that Defendant was properly served with the summons and complaint.

         D. Grounds for Default Judgment

         The entry of default judgment may be appropriate when a defendant has failed to appear in a case. See Fed.R.Civ.P. 55. To date, Defendant has not appeared or otherwise participated in these proceedings. On November 19, 2018, Plaintiffs filed their Request for Entry of Default (Dkt. 4), seeking entry of default for Defendant. On that same day, the Clerk of the Court issued the Entry of Default (Dkt. 5) for Defendant. On November 26, 2018, Plaintiffs filed their Motion for Default Judgment. The undersigned U.S. Magistrate Judge then held a hearing on Plaintiffs' Motion for Default Judgment on January 4, 2019, at which no representative for Defendant appeared. Finding the matter uncontested, the undersigned took the matter under advisement to issue this Report and Recommendation.

         II. FINDINGS OF FACT

         Upon a full review of the pleadings and the record in this case, the undersigned finds that Plaintiffs have established the following facts.

         Defendant is a resident of Indiana and operated a business known as Naylor & Sons Environmental Inc. (Compl. ¶ 10.) Naylor & Sons Environmental Inc. was not authorized to operate in the Commonwealth of the Virginia but did so anyway. (Id. ¶¶ 10-11.) At all relevant times, Naylor & Sons Environmental Inc. generated gross revenues exceeding $500, 000.00. (Id. ¶ 18.) Defendant consistently advertised and solicited business outside the State of Indiana and provided services within the Commonwealth of Virginia. (Id. ¶ 17.) On October 10, 2017, Naylor & Sons was dissolved by the Indiana Secretary of State Business Services Division. (Id. ¶ 10.)

         Plaintiffs are current and former employees of Defendant. ¶ 9.) Seven (7) Plaintiffs are residents of Virginia ("Virginia Plaintiffs") while Plaintiff Ernesto M. Diaz is a resident of Maryland. (Id. ¶¶ 1-8.) Plaintiffs performed cleaning services on behalf of Defendant, (Id. ¶¶ 9, 16), and did so as hourly employees (Id. ¶¶ 16, 21). Plaintiffs engaged in services originating outside the Commonwealth of Virginia. (Id. ¶ 19.) Defendant had knowledge of the hours worked by Plaintiffs. (Id. ¶ 23.) From May through August 2018, Plaintiffs were not paid even though Defendant continued to operate his cleaning business. (Id. ¶¶ 23-24.) During this period of unpaid work, Virginia Plaintiffs continued to perform work for Defendant at the property located at 766 N Howard St., Alexandria, VA 22304. (UL ¶¶ 25-26, 28-32.) At the N Howard property, Jesus G. Gonzalez performed 175 hours of unpaid labor; Encarnacion Romero-Alverez performed 245 hours of unpaid labor; Jorge A. Torres performed 175 hours of unpaid labor; Plaintiff Noe Sigfredo Alvarado Torres performed 175 hours of unpaid labor; Lidia M. Adams performed 130 hours of unpaid labor; Ninna K. Adams performed 160 hours of unpaid labor; and Martha L. Torres performed 130 hours of unpaid labor. (Id.)'

         During this same period, Plaintiff Ernesto M. Diaz also went without pay while continuing to perform work for Defendant at the property located at 6060 Tower Court, Alexandria, VA 22304. Qd ¶¶ 3, 27.) He performed 720 hours of unpaid labor, of which 640 hours were non-overtime. (Diaz Mot. Default J. ¶ 3, Ex. 1.) Plaintiff Diaz began working for Defendant in February 2017. (Id. ¶ 2, Ex. 1.) He worked eight (8) hours a day Monday through Friday, arriving at 6:00 a.m. and leaving at 3:00 p.m. (Id.) Diaz also worked five (5) hours on Saturday, thereby working a total of forty-five (45) hours a week. (Id.) From April 2017 to April 2018, a period of seventy-six (76) weeks, Diaz was paid an hourly wage of $11/hour but was not paid any overtime premiums and only received pay for forty-two-and-half (42.5) hours of work per week. (Id.)

         III. EVALUATION OF ...


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